Robust Top-Line Growth Across All Business Lines

Operating highlights:

	Three months
	ended March 31
	2022		2021

Revenues (millions)	$	834.6	$	711.1
Adjusted EBITDA (millions) (note 1)		62.3		59.8
Adjusted EPS (note 2)		0.73		0.66

GAAP Operating Earnings (millions)		29.0		33.9
GAAP EPS		0.32		0.50

TORONTO, April 27, 2022 (GLOBE NEWSWIRE) -- FirstService Corporation (TSX:FSV, NASDAQ:FSV) today reported operating and financial results for its first quarter ended March 31, 2022. All amounts are in US dollars.

Consolidated revenues for the first quarter were $834.6 million, up 17% relative to the same quarter in the prior year, including 10% from organic growth. Adjusted EBITDA (note 1) increased 4% to $62.3 million, and Adjusted EPS (note 2) was $0.73, representing 11% growth over the prior year quarter. GAAP Operating Earnings were $29.0 million, relative to $33.9 million in the prior year period. GAAP diluted earnings per share was $0.32 per share in the quarter, versus $0.50 in the same quarter a year ago.

"We are pleased to have opened the year with strong results, driven by top-line growth that exceeded our expectations," said Scott Patterson, Chief Executive Officer of FirstService. "Our operations delivered very strong organic growth across the board reflecting market share gains and continued momentum with all of our brands," he concluded.

About FirstService Corporation

FirstService Corporation is a North American leader in the essential outsourced property services sector, serving its customers through two industry-leading service platforms: FirstService Residential - North America's largest manager of residential communities; and FirstService Brands - one of North America's largest providers of essential property services delivered through individually branded franchise systems and company-owned operations.

FirstService generates more than US$3.3 billion in annual revenues and has approximately 25,000 employees across North America. With significant insider ownership and an experienced management team, FirstService has a long-term track record of creating value and superior returns for shareholders. The Common Shares of FirstService trade on the NASDAQ and the Toronto Stock Exchange under the symbol "FSV", and are included in the S&P/TSX 60 Index. More information is available at www.ﬁrstservice.com.

Segmented Quarterly Results

FirstService Residential revenues were $394.1 million for the first quarter, an increase of 12% versus the prior year, including 7% organic growth. Top-line performance was driven by core management and sited labour contract growth, particularly in our Florida, California, New York and Mid-Atlantic markets. Adjusted EBITDA for the quarter was $30.4 million, up from $29.4 million in the prior year period. GAAP Operating Earnings were $23.4 million, versus $23.2 million in the first quarter of last year. Operating margins were impacted by wage inflation, together with the increased mix of labour-driven services relative to higher margin ancillaries.

FirstService Brands revenues for the first quarter totalled $440.5 million, up 22% relative to the prior year period. The revenue increase was comprised of 12% organic growth, with the balance from recent tuck-under acquisitions. Top-line organic growth was exceptionally strong within our home improvement and Century Fire service lines. Adjusted EBITDA was $36.1 million, up from $33.4 million in the prior year quarter. GAAP Operating Earnings were $15.8 million, versus $16.5 million in the prior year quarter. Operating margins declined as a result of higher labour costs and supply chain disruptions at several of our brands, as well as job mix at our restoration brands.

Corporate costs, as presented in Adjusted EBITDA, were $4.2 million in the first quarter, relative to $3.0 million in the prior year period. On a GAAP basis, corporate costs for the quarter were $10.1 million, relative to $5.9 million in the prior year period, with the increase due to the timing of stock-based compensation expense realized in the current quarter, compared to the second quarter in 2021.

Conference Call

FirstService will be holding a conference call on Wednesday, April 27, 2022 at 11:00 a.m. Eastern Time to discuss results for the first quarter of 2022. The numbers to use for this call are 1) toll-free 1-866-220-4111; or 2) for international callers, 1-862-298-9233, with the conference ID number 7684138 for all participants. The call will be simultaneously web cast and can be accessed live or after the call at www.firstservice.com in the "Investors / Newsroom" section.

Forward-looking Statements

This press release includes or may include forward-looking statements. Much of this information can be identified by words such as "expect to," "expected," "will," "estimated" or similar expressions suggesting future outcomes or events. FirstService believes the expectations reflected in such forward-looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements should not be unduly relied upon. These statements involve known and unknown risks, uncertainties and other factors which may cause the actual results to be materially different from any future results, performance or achievements contemplated in the forward-looking statements. Such factors include: (i) the magnitude and length of economic and operational disruption resulting from the COVID-19 pandemic; (ii) general economic and business conditions, which will, among other things, impact demand for FirstService's services and the cost of providing services; (iii) the ability of FirstService to implement its business strategy, including FirstService's ability to acquire suitable acquisition candidates on acceptable terms and successfully integrate newly acquired businesses with its existing businesses; (iv) changes in or the failure to comply with government regulations; and (v) other factors which are described in FirstService's annual information form for the year ended December 31, 2021 under the heading "Risk factors" (a copy of which may be obtained at www.sedar.com) and Annual Report on Form 40-F filed with the United States Securities and Exchange Commission (a copy of which may be obtained at www.sec.gov), and subsequent filings (which factors are adopted herein). Forward-looking statements contained in this press release are made as of the date hereof and are subject to change. All forward-looking statements in this press release are qualified by these cautionary statements. Unless otherwise required by applicable securities laws, we do not intend, nor do we undertake any obligation, to update or revise any forward-looking statements contained in this press release to reflect subsequent information, events, results or circumstances or otherwise.

Summary financial information is provided in this press release. Our interim consolidated financial statements and related management's discussion and analysis will be made available on SEDAR at www.sedar.com.

COMPANY CONTACTS:

D. Scott Patterson

Chief Executive Officer

Jeremy Rakusin

Chief Financial Officer

(416) 960-9566

Notes

1. Reconciliation of net earnings to Adjusted EBITDA:

Adjusted EBITDA is defined as net earnings, adjusted to exclude: (i) income tax; (ii) other (income) expense; (iii) interest expense; (iv) depreciation and amortization; (v) acquisition-related items; and (vi) stock-based compensation expense. The Company uses adjusted EBITDA to evaluate its own operating performance, its ability to service debt, and as an integral part of its planning and reporting systems. Additionally, this measure is used in conjunction with discounted cash flow models to determine the Company's overall enterprise valuation and to evaluate acquisition targets. Adjusted EBITDA is presented as a supplemental measure because the Company believes such a measure is useful to investors as a reasonable indicator of operating performance, due to the low capital intensity of the Company's service operations. The Company believes this measure is a financial metric used by many investors to compare companies, especially in the services industry. This measure is not a recognized measure of financial performance under GAAP in the United States, and should not be considered as a substitute for operating earnings, net earnings or cash flow from operating activities, as determined in accordance with GAAP. The Company's method of calculating adjusted EBITDA may differ from other issuers and accordingly, this measure may not be comparable to measures used by other issuers. A reconciliation of net earnings (loss) to adjusted EBITDA appears below.

	Three months ended
(in thousands of US dollars)	March 31
	2022			2021

Net earnings	$	18,821		$	23,843
Income tax		6,394			7,720
Other income		(535	)		(1,868	)
Interest expense, net		4,366			4,187
Operating earnings		29,046			33,882
Depreciation and amortization		25,910			23,225
Acquisition-related items		1,561			(99	)
Stock-based compensation expense		5,821			2,787
Adjusted EBITDA	$	62,338		$	59,795

2. Reconciliation of net earnings and net earnings per share to adjusted net earnings and adjusted EPS:

Adjusted EPS is defined as diluted net earnings per share, adjusted for the effect, after income tax, of: (i) the non-controlling interest redemption increment; (ii) acquisition-related items; (iii) amortization expense related to intangible assets recognized in connection with acquisitions; and (iv) stock-based compensation expense. The Company believes this measure is useful to investors because it provides a supplemental way to understand the underlying operating performance of the Company and enhances the comparability of operating results from period to period. Adjusted EPS is not a recognized measure of financial performance under GAAP, and should not be considered as a substitute for diluted net earnings per share, as determined in accordance with GAAP. The Company's method of calculating this non-GAAP measure may differ from other issuers and, accordingly, this measure may not be comparable to measures used by other issuers. A reconciliation of net earnings to adjusted net earnings and of diluted net earnings per share to adjusted EPS appears below.

	Three months ended
(in thousands of US dollars)	March 31
	2022			2021

Net earnings	$	18,821		$	23,843
Non-controlling interest share of earnings		(565	)		(3,767	)
Acquisition-related items		1,561			(99	)
Amortization of intangible assets		11,466			10,012
Stock-based compensation expense		5,821			2,787
Income tax on adjustments		(4,495	)		(3,328	)
Non-controlling interest on adjustments		(228	)		(175	)
Adjusted net earnings	$	32,381		$	29,273

	Three months ended
(in US dollars)	March 31
	2022			2021

Diluted net earnings per share	$	0.32		$	0.50
Non-controlling interest redemption increment (decrement)		0.09			(0.04	)
Acquisition-related items		0.03			-
Amortization of intangible assets, net of tax		0.19			0.16
Stock-based compensation expense, net of tax		0.10			0.04
Adjusted EPS	$	0.73		$	0.66

FIRSTSERVICE CORPORATION

Operating Results

(in thousands of US dollars, except per share amounts)

Three months

ended March 31

(unaudited)

2022

2021

Revenues

834,572

711,066

Cost of revenues

575,834

490,812

Selling, general and administrative expenses

202,221

163,246

Depreciation

14,444

13,213

Amortization of intangible assets

11,466

10,012

Acquisition-related items (1)

1,561

(99

)

Operating earnings

29,046

33,882

Interest expense, net

4,366

4,187

Other income

(535

)

(1,868

)

Earnings before income tax

25,215

31,563

Income tax

6,394

7,720

Net earnings

18,821

23,843

Non-controlling interest share of earnings

565

3,767

Non-controlling interest redemption increment (decrement)

4,171

(1,815

)

Net earnings attributable to Company

14,085

21,891

Net earnings per share

Basic

0.32

0.50

Diluted

0.32

0.50

Adjusted EPS (2)

0.73

0.66

Weighted average common shares (thousands)

Basic

44,085

43,696

Diluted

44,500

44,218

(1) Acquisition-related items include contingent acquisition consideration fair value adjustments, and transaction costs.

(2) See definition and reconciliation above.

Condensed Consolidated Balance Sheets

(in thousands of US dollars)

(unaudited)

March 31, 2022

December 31, 2021

Assets

Cash and cash equivalents

165,149

165,665

Restricted cash

31,445

28,606

Accounts receivable

535,283

551,564

Prepaid and other current assets

225,488

218,825

Current assets

957,365

964,660

Other non-current assets

18,915

19,338

Deferred income tax

1,840

1,760

Fixed assets

145,364

138,066

Operating lease right-of-use assets

162,653

159,730

Goodwill and intangible assets

1,207,965

1,225,469

Total assets

2,494,102

2,509,023

Liabilities and shareholders' equity

Accounts payable and accrued liabilities

346,274

386,529

Unearned revenues

114,877

116,415

Other current liabilities

15,443

10,045

Operating lease liabilities - current

48,786

48,047

Long-term debt - current

35,475

57,436

Current liabilities

560,855

618,472

Long-term debt - non-current

645,166

595,368

Operating lease liabilities - non-current

124,392

122,337

Other liabilities

82,297

111,919

Deferred income tax

40,378

42,070

Non-controlling interests

218,743

219,135

Shareholders' equity

822,271

799,722

Total liabilities and equity

2,494,102

2,509,023

Supplemental balance sheet information

Total debt

680,641

652,804

Total debt, net of cash

515,492

487,139

Condensed Consolidated Statements of Cash Flows
(in thousands of US dollars)
			Three months ended
			March 31
(unaudited)			2022			2021

Cash provided by (used in)

Operating activities
Net earnings		$	18,821		$	23,843
Items not affecting cash:
	Depreciation and amortization		25,910			23,225
	Deferred income tax		(623	)		(749	)
	Other		6,773			2,974
			50,881			49,293

Changes in non cash working capital
	Accounts receivable		24,834			8,252
	Payables and accruals		(39,950	)		(26,920	)
	Other		(34,264	)		(3,914	)
Net cash provided by operating activities			1,501			26,711

Investing activities
Acquisition of businesses, net of cash acquired			-			(2,521	)
Purchases of fixed assets			(16,583	)		(13,337	)
Other investing activities			(6,114	)		(2,066	)
Net cash used in investing activities			(22,697	)		(17,924	)

Financing activities
Increase (decrease) in long-term debt, net			29,910			(37,653	)
Purchases of non-controlling interests, net			(5,764	)		(3,391	)
Dividends paid to common shareholders			(8,032	)		(7,192	)
Other financing activities			7,539			7,727
Net cash provided by (used in) financing activities			23,653			(40,509	)

Effect of exchange rate changes on cash			(134	)		210

Increase (decrease) in cash, cash equivalents and restricted cash			2,323			(31,512	)

Cash, cash equivalents and restricted cash, beginning of period			194,271			208,938

Cash, cash equivalents and restricted cash, end of period		$	196,594		$	177,426

Segmented Results
(in thousands of US dollars)


		FirstService		FirstService
(unaudited)		Residential		Brands		Corporate			Consolidated

Three months ended March 31

2022
	Revenues	$	394,083	$	440,489	$	-		$	834,572
	Adjusted EBITDA		30,410		36,082		(4,154	)		62,338

	Operating earnings		23,397		15,751		(10,102	)		29,046

2021
	Revenues	$	350,480	$	360,586	$	-		$	711,066
	Adjusted EBITDA		29,407		33,407		(3,019	)		59,795

	Operating earnings		23,244		16,506		(5,868	)		33,882

FirstService Reports Better Than Anticipated First Quarter Results